The Militant(logo) 
    Vol.60/No.7           February 19, 1996 
Bonn's Cuts In Social Wage Meet Resistance  


STOCKHOLM, Sweden - As tens of thousands of workers in Germany protested government plans to cut early retirement and unemployment benefits, German Chancellor Helmut Kohl held an emergency meeting January 23 with representatives of the employers and the unions. The session was aimed at hammering out an agreement on "labor flexibility" and restructuring the social gains workers in Germany have won - all in the name of reducing unemployment, which stands near 10 percent, or about 4 million workers.

Two months ago the president of the metalworkers union IG Metall, Klaus Zwickel, proposed "an alliance for jobs" that would freeze real wages in return for the employers' pledge to create 333,000 jobs over three years. Kohl early on welcomed the concession offer, while the employers have demanded more and been cautious to promise to reduce unemployment through reducing overtime and shortening the workweek. Instead they claim there will be more jobs if economic growth is stimulated by more work "flexibility" and reduced labor costs.

The government and the political parties are campaigning to lower the social wage. Early retirement pensions are one target. As industries, especially steel, have been restructured and downsized, the bosses have cut tens of thousands of jobs. Many workers in their fifties have opted for early retirement, which current social programs make it possible to live on.

In early January the government announced plans to make it harder to get these early retirement pensions and also to reduce unemployment benefits. More than 70,000 members of the metalworkers union came out in a one-day protest strike on January 22 and demonstrated against the government's plans.

Reflecting the pressures on the union officialdom to appear tough on the question of unemployment, Dieter Schulte, the president of the German union federation, said he expected new jobs already this year. "If it will only lead to a reduction of the growth of unemployment this year I would be deeply disappointed," he said.

Bonn releases plan for cuts
The German government on January 30 announced it had a plan for "growth." Although the German press for weeks had been full of test balloons about proposals to cut the social wage, very little of that was concretely exposed in Kohl's plan. "The welfare state has to be reformed in an evolutionary manner. A revolution would crash the whole system," said labor minister Norbert Blum.

In the plan there are proposals to reduce company and private taxes, cut unemployment benefits and early retirement pensions, and increase privatizations of public enterprises. But most of these proposals are not supposed to take effect for a couple of years.

Included is a proposal to reduce the "solidarity tax," which was first introduced in 1991-92 ostensibly to finance the restructuring of eastern Germany, from 7.5 percent to 5.5 percent. The Free Democratic Party (FDP), a small but important government coalition partner, had campaigned for this. State governments in eastern Germany were outraged by the proposal, despite assurances by Bonn that the East would get the money from other sources. Eastern Germany remains a tremendous problem for the government in Bonn. Workers still think conditions should get better, not worse, and stable, profitable capitalism is far from being reestablished.

A sign of what's ahead was the attempt by the right-winger and former national prosecutor Alexander von Stahl to become the chairman of the Berlin chapter of the FDP. Gunter Rexrodt, the minister of finance in the present Bonn government, had resigned from the chairmanship after a defeat of the party in the state elections in Berlin, where they didn't get any seats. Von Stahl didn't become chairman, but he won a third of the votes.

Von Stahl and his followers want to convert the FDP into the same kind of outfit as the Freedom Party in Austria headed by right-winger Jorg Haider. Haider espouses ultranationalist and anti-immigrant policies and in 1991 was forced out of his position as provisional governor of Carinthia, Austria's southernmost province, for praising the employment policies of the Nazis.

Imperialist competition
As with all the imperialist bourgeoisies in Europe, the German capitalists have too weak a government to deal with the real issues they face - how to gut the social wage to gain competitiveness vis-a-vis its competitors in Europe and North America, and how to be able to play more of a role in foreign policy, especially in the military build-up in Yugoslavia.

The German rulers lag behind most of their competitors in cutting wages and social benefits. The cost of labor in the German chemical industry, for example, is 25 percent higher than in France, and nearly double that in the United States or Britain, according to the chemical employers' association.

The Organization of Economic Cooperation and Development reports that unit labor costs in Germany have risen 22 percent since 1990, compared to a 10 percent drop in the United States in the same period. And the Federal Labor Ministry says that permanent layoffs cost Bonn about $150,000 per worker in pensions and unemployment compensation.

Cuts in the social wage that many feared would be included in the Kohl government's plan, such as having the first day in a sick leave be unpaid - decided in Sweden two years ago - were not even under debate, noted an article in the Swedish daily Svenska Dagbladet. The paper quotes Dieter Hundt, who is to become chief of the employers' association, in Germany saying, "We have not come as far as in Sweden yet." But the rulers in Sweden have also not carried out what they need to and fear social unrest if they push too hard.

A recently announced Swedish government program - dubbed the Persson plan after Minister of Finance Goran Persson, who soon is to become prime minister and head of the Social Democratic Party - includes plans over the next few years to restore unemployment benefits and sick leave payments to the levels they were at a few years ago. In recent opinion polls in Sweden the Social Democrats have been bypassed by the Conservative Party. Both polled around 30 percent, with the Social Democrats down from about 50 percent two years ago.

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